Federal prosecutors announced Mar. 29 the unsealing of an indictment charging Emmett Martin, Kenneth Johnson, Willie Lloyd, Bradley Pearson and Maurice Johnson with the following: 1) conspiracy to import cocaine; 2) conspiracy to possess with intent to distribute cocaine; 3) four counts of attempted possession with the intent to distribute cocaine; 4) four counts of attempt to import cocaine into the United States; and 5) one count of carrying a firearm in relation to a drug trafficking crime. Emmett Martin, Kenneth Johnson, Willie Lloyd, and Bradley Pearson are members of the Int’l Longshoremen Ass’n. If convicted, each defendant faces possible terms of life imprisonment and up to $4 million in fines.

The Labor Council of San Diego & Imperial Counties (a.k.a., Committee on Political Education) and two other political committees appear to have violated San Diego campaign law by accepting contributions from groups or corporations and then spending money on behalf of City Council candidates, according to San Diego Elections Officer Joyce Lane. "They all think they're operating under the law, but there is a lack of clarity in this area," Lane said. "Our ordinance is pretty strict on its face. I hope the Ethics Commission will be able to provide some clarification. I do think it's really murky."

Recently, allegations of wrongdoing have flown back and forth between the Labor Council and the two other committees, the Lincoln Club, a Republican business group, and the San Diego County Republican Cent. Committee during the race for the 2nd District City Council seat.

Jeffrey L. Grayson agreed Apr. 16 to plead guilty to two felony counts in connection with the collapse of his union pension management firm, Capital Consultants LLC of Portland, Or., which will likely result in a prison term. Grayson is cooperating with federal prosecutors in hopes of getting a lighter sentence and has provided new information on Andrew Wiederhorn's role in the firm's downfall. Wiederhorn was the chief executive officer and controlling stockholder of Wilshire Credit Corp., which defaulted on $160 million in loans and contributed to the collapse of Capital Consultants. Total client losses, mostly from union members, are estimated to be $355 million.

The U.S. Atty.'s Office in Portland filed revised charges against Grayson, accusing him of two felonies: one count of mail fraud and one count assisting the filing of a false tax return. The charges, filed as a criminal information, described Wiederhorn's involvement in deals that allegedly compromised Grayson's independence as an investment manager. Wiederhorn has not been charged, but the U.S. Attorney has notified him that he is the subject of an ongoing grand jury investigation.

Almost 55 months after confessing felonious conduct, Teamster money-laundering scandal figure, Jere Nash, has finally been sentenced. U.S. Dist. Judge Thomas P. Griesa (S.D.N.Y., Nixon) sentenced Nash Apr. 9 to a mere two years probation for his role in a series of schemes which lead to the embezzlement of some $885,000 from the Int'l Bhd. of Teamsters' treasury and to $538,100 in illegal campaign contributions to the failed reelection campaign of expelled IBT president Ron Carey. The sentencing appears to have been hush hush: the four N.Y.C. major dailies and the two Washington, D.C., dailies apparently did not cover the sentencing (as of Apr. 15), which is surprising given the red hot coverage of the scandal in the past.

As reported in the last issue, a federal grand jury in Washington, D.C., is probing stock transactions by directors of a union-dominated insurance firm ULLICO linked to the now bankrupt firm, Global Crossing. The Wall St. Journal reports that internal documents reveal that ULLICO officers and board members cashed in on some 71,000 ULLICO shares between Jan. 2000 and Sept. 2001, possibly at the expense of the very union pension funds to which they owed a fiduciary duty. The profits were potentially huge. For example, Martin J. Maddaloni, president of the United Ass'n of Plumbers & Pipe Fitters, allegedly reaped a $184,000 profit from timely selling of a mere 2,000 shares of his ULLICO stock back to ULLICO in 2000.

In a joint hearing Apr. 10, two subcommittees of the House Committee on Education & the Workforce heard testimony about whether the Dep't of Labor's union financial reporting and disclosure regulations are meeting the requirements of the Labor Mgmt. Reporting & Disclosure Act, a.k.a, the Landrum-Griffin Act. "The law was intended to ensure that rank-and-file union members have a full, equal, and democratic voice in union affairs," said Rep. Sam Johnson (R-Tex.), chairman of the Employer-Employee Relations Subcommittee. "With the passage of time, we have seen some aspects of union democracy thrown to the wayside and often ignored. Union leaders should respect the law, and [DOL], which is responsible for putting teeth into the LMRDA, should aggressively enforce it. Unfortunately, neither is always the case."

Dominick Bentivegna, a union staffer who stood up to corruption in a powerful N.Y.C. local, was fired Apr. 9 from his $85,000-a-year union job after declaring he would run for president of Serv. Employees Int'l Union Local 32B-32J. He helped oust local boss Gus Bevona in 1999 amid reports of financial irregularities and a $6 million black marble penthouse.

Under new leadership, Bentivegna took a job supervising shop stewards. But he became fed up with excessive spending and a lack of union democracy, and he marched into local president Michael Fishman's office and declared he was running against the boss in Sept. 2003. Twenty minutes later, he says, he was terminated. "He said, 'You're not going to work for me and run for office,'" Bentivegna said.

"It's not about democracy," Fishman said. "If you disagree with the program, you can't be working here." Attorney Alan Serrins said Bentivegna will contest the firing in federal court. Bentivegna retains his elected position as assistant secretary to local. [Daily News; N.Y. Post 4/11/02]

More than two dozen union presidents were reportedly invited to buy shares in Global Crossing, as the Bermuda-based telecom was first offering its stock to the general public. Now a federal grand jury in Washington, D.C., is probing stock transactions by directors of insurance and investment firm ULLICO (f.k.a. Union Labor Life Ins. Co.), a union-dominated firm founded by the AFL. ULLICO's board is chaired by ex-AFL-CIO Building & Construction Trades Dep't president Robert A. Georgine and includes many current and ex-union presidents.

Reportedly, the investigations focus on trading privileges that allegedly allowed ULLICO's board members to profit from the purchase and sale of its shares. The transactions were lucrative because the privately held company's stock price was reset each year based on its book value and the board members could anticipate the change. ULLICO's shares had risen on the strength of several deals, including a $500 million profit on a $7.6 million investment in telecom firm Global Crossing, which declared bankruptcy in Jan. 2002.

The Dep't of Labor sued Washington, D.C.-based Trust Fund Advisors, Inc., and its parent, ULLICO Mar. 22 for imprudently investing more than $10 million in assets of two Laborers' Int'l Union of N. Am. pension funds in a risky real estate project. LIUNA hired TFA as a union fund manager for the Local Union and District Council Pension Fund and Nat'l Indus. Pension Fund. TFA hired ULLICO to handle all real estate investments made on behalf of clients of TFA. ULLICO-TFA contracted with the pension funds in 1993-94 to handle their investment in real estate. Admitted criminal and ex-LIUNA boss Arthur A. Coia was elected to ULLICO's board in 1993 and was on the board as of Sept. 30, 2000, according to a State of N.Y. Ins. Dep't document.

On Mar. 19, trustees and the ex-administrator of the Millwrights Local 1102 Supplemental Pension Plan and Health Plan, which are linked to United Bhd. of Carpenters Local 1102 in Warren, Mich., agreed to restore $597,775 to the plans. Further, U.S. Dist. Judge Avern L. Cohn (E.D. Mich., Carter) ordered the trustees to resign their positions with the plans.

Cohn's judgment resolved a suit filed Aug. 23, 2000, by the Dep't of Labor against administrator Automated Benefit Services, Inc. and trustees Walter R. Mabry, Jerry D. Moore, Ronald M. Krochmalny, Keith R. Scrutton, Milford E. Woodbeck, Sr., and Roy Shields. Mabry is also the executive secretary-treasurer of UBC's Mich. Reg'l Council of Carpenters & Millwrights. Allegedly, the defendants violated pension laws by 1) paying unreasonable compensation and fees to ABS, 2) failing to prudently invest the plan's cash assets, 3) paying excessive fees relating to the collection of employer contributions to the plans, and 4) making mortgage loans to participants which did not comply with the terms of the pension plan document.

Patrick Stiles, ex-boss of Aurora (Ill.) Firefighters Local 99, pled guilty Mar. 21 to felony theft in connection with the embezzlement of union and firefighters association funds and was sentenced to 2 years in prison. The plea agreement, entered in Kane County Circuit Court before Judge Donald C. Hudson, requires Stiles to pay $244,000 in further restitution to Aurora Firefighters Local 99 and the Aurora Firefighters Relief Ass'n. Stiles was released on bail and ordered to turn himself in to authorities on Apr. 23.

Aurora police testified at a bail hearing in Oct. that Stiles had stolen about $350,000 from the two organizations, but the restitution was based on a $275,000 settlement in a related civil suit. Stiles, a firefighter, resigned Jan. 15 after 11 years with the Aurora Fire Dep't. He was secretary and treasurer of the Relief Ass'n from 1995 to 1999 and held the same post at Local 99 from 1992 until his resignation.

In a Mar. 21 interview with the Bureau of Nat'l Affairs' Daily Labor Report, the Dep't of Labor Inspector General Gordon S. Heddell said that recently released Office of the Inspector General statistics show an increase in labor racketeering case activity involving labor unions, with a specific focus on the four unions that have been identified as under the influence of organized crime -- the Int'l Bhd. of Teamsters, the Laborers' Int'l Union of N. Am., the Hotel Employees & Restaurant Employees' Int'l Union, and the Int'l Longshoremen's Ass'n. Reportedly, there currently are 357 pending labor racketeering investigations under way at OIG, 39% of which involve organized crime. Of the 357 investigations, 44% involve pension and welfare benefit plans, according to the statistics.

On Mar. 15, U.S. Dist. Judge Blanche M. Manning (N.D. Ill., Clinton) sentenced John Serpico, ex-president of the Cent. States Joint Bd. and ex-vice president of the Laborers' Int'l Union of N. Am. to six concurrent 30 months prison terms followed by three years of supervised release. CSJB is a labor organization which handles pension and other employee benefit funds for eight locals including locals of LIUNA and the Int'l Union of Allied Novelty & Production Workers. A jury convicted the powerful Chicago boss July 16 on six counts of mail fraud. Manning also fined him $100,000, ordered him to make restitution of $30,000, and ordered him to pay the cost of imprisonment. Serpico was CSJB president from 1975-94 and, at the time of the conviction, was a $50,000-a-year consultant. He was purged from LIUNA in 1995.

Two former leaders of the Riverside County, Cal., chapter of a statewide fire fighters union have reportedly been "disciplined" after an internal union probe showed they embezzled at least $5,000 of the chapter's funds. Union spokesman Terry McHale said the ex-officers admitted they spent chapter money on personal uses -- for apartment rent and computers -- in 2001. McHale said the men, whose names were not released, have signed agreements to reimburse the union and have their paychecks garnished if they fail to make payments on time.

However, he said the union has not asked authorities to investigate. Many members know the identities of the two allegedly admitted embezzlers, and their reputations have been stained at the Cal. Dep't of Forestry & Fire Protection, McHale claimed. "What was done was wrong, and it is being dealt with in the firmest possible way," alleged McHale. "We're an association of human beings, and sometimes human beings make mistakes."

Int'l Bhd. of Elec. Workers Local 520 in Austin, Tex. are under investigation as a result of its intense representation battle that has produced a slew of charges of unfair labor practices, an arrest, and allegations of death threats, libel, racketeering, and slander. At issue is a $6.5 million City of Austin contract awarded to a nonunion firm, Titus Elec. Contracting. The local has tried pickets, a corporate campaign and formal complaints accusing Titus of violating federal labor law. Titus, which launched the publicity skirmish, has called police to the picket lines at least twice, resulting in a trespassing arrest, and has accused union supporters of phoning in death threats.

United Ass'n of Plumbers & Pipe Fitters Local 15 business manager Thomas Martin resigned Mar. 15 and the Minneapolis-based local was placed into emergency trusteeship by its int'l union. UA's prepared statement cited a union constitutional provision allowing the int'l union to take control of the local's affairs "on being presented with a charge that an officer of a local union may have committed dishonest acts involving any of the local union's assets." UA int'l president Martin Maddaloni reportedly received such a complaint involving the Local's "market recovery fund." Unions use market recovery funds to help union contractors compete with non-union firms that pay lower wages. Some developers say they prefer union labor if the wage rates are competitive because it is believed union projects get less scrutiny from local inspectors than when non-union labor is used.

The ex-president of the Am. Fed'n of Gov't Employees Local 1812 in Washington, D.C., is scheduled to be sentenced Apr. 4 for felony misappropriation of union funds. Hope Butler, who headed the union local until June 2000, pled guilty Dec. 7 in to making false statements to federal agents. She and her sister-in-law, Nadine Crump Butler, were accused of embezzling union funds and then lying about it in reports to the Dep't of Labor. Crump Butler pled guilty to a misdemeanor charge of fraud. The scam reportedly netted some $20,600. Local 1812 represents about employees for Voice of America and other Int'l Broadcasting Bureau positions. IBB is an independent federal agency that formerly operated as the broadcast portion of the U.S. Information Agency, which merged into the State Dep't in 1999.

Geri E. Abbe, ex-office secretary for Ass'n of Western Pulp & Paper Workers Local 5 in Camas, Wash., pled guilty Mar. 22 to one count of embezzling $15,690.80 in union funds. The U.S. Atty.'s Office in Tacoma brought the charges on Feb. 22. The case has been assigned to U.S. Dist. Judge Franklin D. Burgess (W.D. Wash., Clinton).

According to the plea agreement, between Feb. 1998 and June 2001, Abbe was Local 5's office secretary, and her duties included filling out payroll vouchers. On 16 occasions she embezzled funds through bogus payroll claims. For example, on Feb. 18, 1998, she submitted a payroll voucher in which sought pay for 70 hours of work during the one-week period ending on that date. However, in truth, she worked only 35 hours during that period. After securing an offical's signature, Abbe issued the fraudulent check to herself. She embezzled $14,245 via this scheme.

U.S. Customs Inspector Gregory B. Floto, who is the ex-president of Nat'l Treasury Employees Union Chapter 116 in Nogales, Ariz., pled guilty Mar. 15 to filing a false report with the Dep't of Labor to conceal his embezzlement of union funds, according to the Dep't of Justice's Office of Public Affairs. According to DOL's Office of Labor-Mgmt. Standards, Floto pled guilty to one count of making false statements in violation of 18 U.S.C. § 1001. The specific amount of the embezzlement was not disclosed.

Floto, who has been president of NTEU Chapter 116 since 1989, admitted to stealing thousands of dollars in union funds for his personal benefit between 1994-97. Floto confessed to using union checks to pay balances due on his credit cards bills for personal charges unrelated to union business, including charges for clothing, jewelry, and a family vacation. He also admitted using union checks to pay directly for painting his home and other home improvements. Further, he admitted double billing the union and the U.S. Customs Service for identical official travel expenses.